Revised water and sewer rate increases coming before the Oceanside City Council on Wednesday are far higher than those tentatively approved by the council last month.

Water utility officials said the higher increases are required mostly to satisfy a bond rating agency that put the city on a credit watch last week.

"They're concerned about having sufficient revenue to cover debt," said Oceanside's water utilities director Lonnie Thibodeaux.

Rates also must be higher because since Sept. 1 the city has been absorbing a rate increase on the water it buys from the Metropolitan Water District through the San Diego County Water Authority, Thibodeaux said. The city imports about 80 percent of its drinking water.

So far, the city is about $1 million in the hole because its rates aren't sufficient to cover the 18.1 percent rate hike the Water Authority imposed in September, Thibodeaux said.

The revised proposal would raise the monthly water bill for a typical single-family homeowner in Oceanside from $42.42 to $51.52 ---- a 21 percent increase, Thibodeaux said. He said a typical monthly sewer bill would rise from $35.11 to $45.48 ---- about a 30 percent increase.

The council last month approved rate increases that would have pushed a typical water bill to $48.76 and a typical sewer bill to $40.07. Councilmen Rocky Chavez, Jack Feller and Jerry Kern voted for the increases. Mayor Jim Wood and Councilwoman Esther Sanchez opposed them, but they offered no alternative on how the city should pay for its increasing water costs.

The bond rating agency Standard & Poor's is concerned that the lower increases tentatively adopted last month wouldn't raise enough money to cover bond payments combined with the higher cost of water and continue operating the system without spills and water or sewer line breaks, Thibodeaux said.

The issue was going to the council for a second vote Wednesday even without the revised rate recommendation because of a legal technicality.

Although the council members voted to adopt the lowest of four rate options, the ordinance before them Oct. 14 was for a higher option, City Attorney John Mullen said.

Feller and Chavez said Tuesday that they had qualms about raising rates as high as utility officials now advise.

"I'm only going to do the minimum amount, the amount of money that pays for the water and the minimum that maintains our credit rating," Chavez said.

He said he wants assurances from utility officials that they aren't raising rates to pay for future projects.

"I just want to make sure I can look the citizens in the face and say this is the minimum amount," Chavez said. "I have a natural suspicion of government."

Thibodeaux said the revised rate proposal is "just as conservative as we can possibly be."

Feller said he was prepared to go along with the increases the council tentatively approved Oct. 14 but doesn't want to go higher unless it's "absolutely necessary."

Kern said the city has little choice after Standard & Poor's put the city on a "credit watch with negative implications" on Friday.

"Do I like doing this? No," Kern said. "We have to maintain that debt coverage, that's the thing."

The rating agency warned that if the city doesn't raise rates so it can make required payments on $18.6 million in sewer bonds, investors could demand that the city repay the full amount immediately.

The agency said the city's bond rating also could drop, which means the city would have to pay higher interest rates on money it borrowed for planned water and sewer projects.

Thibodeaux said funding for none of those projects is included in the revised rate increases. He said utility officials would return to the council in 2011 seeking an additional rate increase to cover construction of needed projects.

Wood said he didn't want to tip off his council colleagues on how he'll vote Wednesday but predicted the council majority would approve an increase in rates.

"I'm not happy about the rate increase for the senior community out there. It's tough enough with the economy," Wood said.

The mayor also said he's reluctant to raise rates until the state Legislature deals with the broader issue of the state's water supply.

Call staff writer Ray Huard at 760-901-4062.